Taxpayers who have not transferred or withdrawn against a pension fund need do nothing.

The New Zealand government proposes retirement savers who have not declared their pension transfers or income should pay tax on 15% of the value of their transfer fund or pension payments. The balance will remain tax free and no penalties or interest will be applied for late declaration.

The outcome of the proposed new law is FIF rules will be abolished for foreign superannuation schemes.

Just how this will affect New Zealand QROPS remains unclear.

NZ QROPS market consolidation

Measures are already in place that exempt expats and other New Zealand residents from tax on pension transfers under certain circumstances.

The New Zealand QROPS market is also undergoing a major consolidation as smaller Kiwisaver schemes are swallowed or join with other schemes to form larger funds to benefit from economies of scale.

New Zealand has 48 QROPS funds – the same as Guernsey – and ranks sixth in the world as the largest provider of schemes.

“The idea behind the amnesty is to encourage taxpayers who are outside the system to jump back in,” said New Zealand tax lawyer Michael Reason. “No doubt the government hopes that tax revenues will improve in the long run if the system is made simpler and fairer for everyone.”

Lawyers and QROPS advisers suggest that non-compliance by retirement savers is that felt the system unwieldy and punitive.

Until QROPS tax rules in the UK changed in April 2012, New Zealand was a favourite QROPS destination for British expats and boasted more than 60 schemes.

Compiled by the leading pension experts, our QROPS guide outlines what a transfer entails, when it’s the right option, and ultimately, how to create a secure financial future. You can download the guide here.